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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
In the Matter of ) CUID No. TX1060 (Argyle)
)
Brookridge Cable Special Purposes Partnership)
)
)
Order Dismissing Rate Complaint )
)
ORDER
Adopted: August 21, 1997 Released: August 25, 1997
By the Acting Chief, Financial Analysis and Compliance Division, Cable Services Bureau:
1. In this Order we dismiss the complaint against the rates that the above-captioned operator
("Operator") was charging for its cable programming services tier ("CPST") in its cable system in the
community set forth above. We have determined that in the relevant franchise area the cable operator
provides cable service to fewer than 50,000 subscribers and that Operator fits the definition of a "small cable
operator" as defined in Section 623(m)(2) of the Communications Act of 1934, as amended
("Communications Act") and the Commission's rules thereunder.
2. The Communications Act authorizes the Federal Communications Commission
("Commission") to review the CPST rates of cable systems not subject to effective competition to ensure that
rates charged are not unreasonable on receipt of a complaint as to such rates and to determine correct rates
and any refund liability. Throughout the rate regulation process initiated by the 1992 Cable Act, special
attention has been given to the needs of small cable systems.
3. In the Telecommunications Act of 1996 ("1996 Act"), Congress amended Section 623 of
the Communications Act and redefined a small cable operator as one that "directly or through an affiliate,
serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with
any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000." The
Commission's rules currently define one percent of all cable subscribers in the United States as equivalent
to 617,000 subscribers. The Commission's rules also define an affiliated entity as one which "holds a 20
percent or greater equity interest, passive or active, in the operator or exercises de jure or de facto control
over the operator." In the 1996 Act, Congress determined that, effective February 8, 1996, the Commission
shall not apply its CPST rate regulation rules, promulgated under Sections 623(a), (b) and (c) of the
Communications Act, to a small cable operator in any franchise area in which that operator services 50,000
or fewer subscribers.
4. Our review reveals that Operator is a small cable company pursuant to Section 623(m)(2)
of the Communications Act. Because Operator serves fewer than 50,000 subscribers in the franchise area
in which the community listed above is located, the Operator's CPST rates in this community have
effectively been deregulated by the 1996 Act. The complaint against the Operator in this community was
filed prior to the passage of the 1996 Act. We conclude, given all of the circumstances presented including,
in particular, the Congressional finding that post-1996 CPST rate regulation is unjustified for systems of this
size, that there is no likelihood that adjudication of this complaint through to the end of the process would
result in a net rate benefit to subscribers. To the contrary, this process would engage the resources of both
the private parties involved and the Commission, while the system operator, in light of Section 623(m), could
not effectively be restricted from offsetting any possible prior years' liability against a contemporaneous
actual or putative rate increase. Accordingly, the complaint will be dismissed. We find this course of
action not only consistent with Section 623 but necessary to implement the Congressional intent embodied
in the small company provisions of the 1996 Act and to avoid futile adjudications.
5. Accordingly, IT IS ORDERED, pursuant to Sections 4(i), 4(j), 303(r) and 623(m) of the
Communications Act of 1934, as amended, 47 U.S.C. Sections 154(i), 154(j) 303(r) and 543(m), that the
complaint against the CPST rates charged by Operator in the community referenced above IS DISMISSED.
6. This action is taken pursuant to delegated authority under Section 0.321 of the Commission's
rules, 47 C.F.R. Section 0.321. If any section, subsection, paragraph, sentence, clause or phrase of this Order
is declared invalid for any reason, the remaining portions of this Order shall be severable from the invalid
part and shall remain in full force and effect.
FEDERAL COMMUNICATIONS COMMISSION
Margaret M. Egler
Acting Chief, Financial Analysis and Compliance Division
Cable Services Bureau